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A bad exhaust manifold coolant temperature sensor (broken) will cuase a fault code and the engine pwer will be limited by the sensor being bad. Replace the sensor, they are relativley cheap about $25 from Merc.
This being bad would not really cause the oily sooty mixture depositing on the transom and if you ran with a full time power reduction from this sensor being broken or bad it could contribute to more soot as the power limiting from a code like this will pull back timing and fuel to reduce power.
However the plug you show has a lot of evidence on the base for oil burning and is pretty dirty with burned oil residue there even with the center electrode clean and white. I would recommend you do two things:
1. Do a compression and leak down test and see where compression numbers are. They should test at about 150-160psi warm engine and the leakdowns if measured should be less than lets say 10-12%. If the compression numbers come up low in any cylinder, try squirting in a little oil into that cylinder and retesting the compression and see if it comes up closer to these numbers. If the oil squirted in raises the compression a fair amount it indicates you have ring sealing issues and this would cause addtional oil burning and mix with exhaust gases to form an oily sooty transom mess.
2. If the compression numbers and leak down numbers for all cylinders come up to spec. and within good ranges then your oil problem can come from a problem a lot of 2001-2003 earlier 496 engines had that involved a bad intake gasket seal between the manifold and the head at the intake ports on the bottom edge of the ports where the intake vacuum leak would suck oil and oil vapor into the intake port deliver it into the cylinder where the engine would burn the oil and compression would not show low or be affected.
The fix for this is to remove the intake manifold, use the new GM (only)replacement intake manifold gaskets and the new GM longer intake hold down bolts (black), original ones were to short and silver in color under the Merc black paint, that properly clamp the manifold down and seal the intake port bottom at the gasket.
This stopped the oil being sucked into the intake track and stopped the oil burning issue.
All the 496's -8.1L engines were built the same on the same line at Tonawanda, NY and then shipped to all marine engine companies like Merc, Volvo, Crusader, etc. for marinization.
GM truck division actually had a recall out on these 2001 -2003 engines in trucks to replace the intake gaskets and bolts as the problem was more noticable in trucks than in the boat engines but we have seen this problem in quite a few 496's and when fixed, this fix stopped the oil burn if it was there.
Not saying these are your issues, but that dirty base on the plug and the oily sooty transom mess is kinda making me feel this may be your problem.

Hope this info and suggestions help.

Best Regards,
Ray @ Raylar

Every Plug looks exactly the same. Here is a pic of all 8 plugs. There is virtualy no difference in color or the black ring on any of the plugs..... If it were a bad valve or bad ring, one or two plugs would look bad not all of them right? Each plug has a darker spot on one side of the ceramic. So in the pic, some show very dark, the other side is lighter. Basically all plugs show the same pattern.

http://www.bradzgarage.com/velocity/IMG_0397.JPG

Based on the above information from Raylar, I am leaning heavily on the issue being the intake gasket. It makes perfect sense too. When I take the boat out and run very mild I have little soot. But when I run hard (creating more vacuum) is when I see the really gressy black soot..... Again the boat runs so damn strong, it is hard to believe there is an issue with compression....

Where would I purchase the correct intake gasket and bolts? From my local marine store or direct from a GM dealership? Raylar, are these parts you stock? If so what would total cost shipped to 48192 run me?

Another thread on the topic said that fixed his soot problems.

I have the same boat and mine cleaned up alot when i went through and cleaned the fuel system screens and things, but i have noticed that when i get fuel from certain places it makes alot more soot then others which it could be fuel additives added from when i get ethanol gas too....

Low Psi:

Just go to a GM dealer -parts and order the new type 8.1L intake gaskets for a 2001 -2004 2500-3500 series truck with 8.1L engine and buy a set of 10 intake bolts (black) from a 2005 -2009 same truck and engine and you'll have the parts you need to change the gaskets and get the new ones sealing properly.
You will notice your old intake gaskets would be the black all plastic ones with red silicone thin insert seals. The new gaskets will be metal framed with black silicone thicker gaskets seals. They are much thicker and compress and seal much better.
Now that you show all the plugs it also looks like you are burning off a pretty rich mixture at the base of the electrodes where you can see the black soot buildup. You may still have to get an O2 sensor installed in your exhaust riser and take readings at 200 rpm intervals. The air fuels should stay in the 12.0 to 12.5 to 1 range at most rpms and if they are real fat, lets say in the low 11's or in the 10's the soot is gonna be bad even without extra oil in the cylinders. An overly rich (fat) mixture will cause a lot of soot and realy shorten the life of the engine with ring and ring seal degredation.

Best Regards,
Ray @ Raylar

May iPhone camera shows these plugs with a lot of black soot, but in actuality it is a very light brown, I think it is a combination of a shadow and the lighting that shows these are very dark. The darkest one in the picture is actually a very light brown color. Almost identical to the one I showed originally. But that black oil ring is present on each one.

Raylar,

If you had this engine, would you start with the intake gasket?

Raylar,

I have the new gasket and bolts on order from the local Chevy Dealer. $165.00 and 3-5 days.... I have used the boat this way for 2 seasons so another week isn't going to kill me...... Anyway, what are the torque specs on the intake bolts? Anything else I need to be aware of when removing the intake? Thanks for all the help!!

The bolts should be torqued down slowly from the center out and only to about 12-15 ft/lbs. Use a 1/4" drive rachet and #10 mm wobble socket. This keeps you from using to much torque with a 3/8" or 1/2" size ratchets and the smaller size lets you get into the tight spaces around the injectors and fuel rail.
We make sure we use RTV gray silicone and put an extra size dollip in the corners where the manifold gasket mates up with the end seals.
I still think you should do the compression and leakdown test if you can to help eliminate that possibility.

Hope this is most of your issue here and this will help get rid of your oily soot.

Best Regards,
Ray @ Raylar

I was able to locate the actual GM Service Bulliten with the torque pattern and specs. I have a few days until the parts come in. Tomorrow is supposed to be a windy overcast day here in Michigna, so I am going to replace that broken temp sender on the exhaust manifold and will do a compression and leak down test tomorrow.

When I do the intake gasket, in the corners where the gaskets meet the rubber end pieces do I put the RTV on both top and bottom? It has been a long time since I have wrenched on an engine so I am a little rusty.. Last motor I worked on was an old school 350, and I always remembered taking the rubber ends and throwing them aside and use sealant all the way across......